George Gleason: We’ve not lifted any teams out. It’s been one-offs now. As it turns out, we’ve hired people — several people that have worked together in the past, but we didn’t hire them as a team. We hired those were individual initiations on our part to those individuals. We think we’ve acquired some really great talent, and we’re getting those guys in and getting them ramped up and deployed as quickly and effectively as we can. But we’re going to do it the right way. We’re going to do it with proper governance and risk assessments and training and make sure that we’re all lined up with everything we need to do. We started talking a little over a year ago about getting in the mortgage business, and we started originating yesterday in the mortgage business.
So we’re going to take the time it takes to do it right because it’s very important that the business that we generate from these new team members fully aligns with our corporate philosophy on credit risk and profitability. So we’re very excited about this. So we’ve got some great team members hired and have our eye on some more great team members. And as we said in that earlier question, it’s pretty much across all lines of business in our company, except ASG and indirect. We’re not — we’re kind of fully built out where we need to be right now in those units, but everywhere else, we’re adding talent.
Brian Martin: Got you. Okay. So it’s more adding talent to existing businesses rather than new business lines. That’s — I appreciate that. And then just maybe the last two is just — I don’t know if it’s more for Tim, but just on the reserve build and just kind of how you’re thinking about reserve levels here given the heavy lifting you guys have already done? Just maybe any commentary on the outlook, Tim there? And then secondly, just on the capital side, I think given the growth in profitability, I guess, is your expectation that capital levels can be stable or maybe up as you go through the balance of the year?
George Gleason: Before you answer that, Tim. I do want to say some of these team members we’ve hired will introduce kind of incremental expansions of existing lines of business, broadening that scope of that business line and ultimately, I think, bring some additional business lines to us that we will launch in future quarters and years. But we will do that in a very intentional, very controlled manner. But yes, I think we will not just incrementally add to existing businesses, which is the initial focus but will broaden the scope of products and services offered by those businesses and add lines over the next couple of years. Now, Tim?
Tim Hicks: Yes, Brian, on your provision question, as we mentioned earlier in the call, rates being higher for longer, certainly good from us, from an earnings perspective and our trajectory of net interest income. But could put some pressure on some of our borrowers as rates stay higher for longer, which is why you continue to see the build that we had in the quarter. As rates come down, obviously, that puts less pressure on the interest costs of some of our borrowers. And so I would anticipate a lower level of provision at a time, rates were to start coming down. And then on your capital question, yes, I mean, I think it depends on each quarter’s growth of what it will do from a quarter — of our capital ratios, what they will do from a quarter-to-quarter basis, but obviously, have a strong earnings profile, strong earnings retention profile and that can support a lot of growth.
But as George said earlier, our growth can vary from quarter to quarter, and that may make one quarter a decline and another quarter of an increase in our capital ratios. But over the year, I would certainly expect us to be able to maintain, to grow slightly our capital ratios, risk-based capital ratios.
Brian Martin: Got you. Okay. Thank you.
Operator: One moment for our next question. Our next question comes from Brandon King with Truist. Please proceed with your question.
Brandon King: Just one for me and following up on the commentary around getting to that 50% RESG mix for the total loan portfolio. Do you think you need M&A to get there?
George Gleason: No. I think M&A possibly could accelerate that or augment that. But you never know if you’re going to get an acquisition or not. So no, I don’t think we need it. I think we get there organically.
Brandon King: Okay. That’s all I had. Thank you.
George Gleason: Thank you.
Operator: One moment for our next question. Our next question comes from Samuel Varga with UBS. Please proceed with your question.
Samuel Varga: Good morning everyone.
George Gleason: Good morning.
Samuel Varga: George, last quarter, you talked a little bit about how the Fed fund cuts expectations sort of make negotiating floors a bit more difficult for you. Since that has shifted as much as it has over the last three, four months, has that become easier again to get the higher floors? Or once clients see the sort of the potential they don’t really like goes at?
George Gleason: No, Sam, it has not made it any easier. I don’t think it’s a lot more difficult either. But obviously, I think most of our customers think we’re at the peak of rates, and they believe rates will come down at some point and they want some relief when they do. So that’s making the negotiation of those floors. So continued difficult conversation. But we need that — we need to do what we can do in that regard. Our customers need to do what they can do. So it’s a very intense negotiation in every transaction.
